Page 14 - 2021 Spotlight NJ's Top Law Firms

12 MARCH 2021
Speaking during a recent webinar, Gene Diaz recounted a call he had received only a day earlier
from a prospective tenant. The user, a small life sciences company, asked if Prism Capital Partners had any vacant laboratory space at its ON3 campus in northern New Jersey.
Prism, of course, has long since leased up its existing
has become increasingly important
to life sciences users. That means the state’s lack of move-in-ready lab space — and its lengthy approval process for new construction — puts it at a disadvantage to competing markets.
“Time is one of the all too important considerations — time and ease — for people to establish these businesses,” said Diaz, a principal partner with Nutley-based Prism. He spoke during a Feb. 23 virtual forum hosted by NAIOP New Jersey, noting that even sites with the proper zoning in place are prone to delays, the kinds that can lead a tenant to look elsewhere.
“The fact that you have to go through a year or more of a process with
a project that’s as of right is an absolute nonstarter for anybody in the business world that’s considering New Jersey,” he said. “And that is one of the major impediments we’ve got to growing the life sciences industry
here in New Jersey.”
Diaz said the pandemic has highlighted the state’s continued strength in
health care and medicine, citing New Jersey’s role in research, testing and developing treatments for COVID-19. It’s a reminder that the state “remains a powerhouse of intellectual talent” across the private sector and its network of hospitals and universities, which dovetails with its location and its access to the capital markets.
But demand for lab and R&D space was on the rise even before COVID-19. Dan Loughlin, a broker with JLL
who specializes in pharmaceutical and biotech clients, pointed to eight legacy life sciences properties in the state that had little to no vacancy, while highlighting more than 1 million square feet of tenant requirements in the market.
Those users ranged from generic drug makers to medical device companies
to those involved in cell and gene therapy. But capturing much of that demand is difficult without turnkey spaces, according to Loughlin and others who discussed how to help New Jersey leapfrog other markets.
“Some of the companies that are coming out of incubators or innovation space don’t have the time to wait for anewlab...to
be designed and
permitted and
then to be built,”
said Loughlin, a
vice chairman
based in JLL’s
Parsippany
office. “They’re
going to focus on
existing prebuilt space that they can move into on a timely basis.”
JLL said its client, Thor Equities, is “trying to get in front of that market by building out some prebuilt space” at 95 Greene St. in Jersey City, a 350,000-square-foot building that the firm is retrofitting to suit R&D users. He also noted that other life sciences firms are “in a better planning cycle” and can wait a year to 18 months
to develop a new lab space, which he believes New Jersey can also accommodate.
Options such as 95 Greene are in especially short supply in New Jersey. Tim Sullivan, the CEO of the state Economic Development Authority, said the lack of turnkey life sciences space is especially glaring in urban or high-density settings, where there is a mix of other uses such as residential, retail and office.
He pointed to The Hub in downtown New Brunswick, a sweeping research, business and retail campus being planned by the New Brunswick Development Corp. The first piece of the project, a 10-story, 210,000-square- foot building across from the city’s train station, could break ground this summer after securing commitments from four of the state’s largest
Eugene Diaz
buildings at the property. And
as Diaz noted, the developer
is “maybe two years away
from delivering something — assuming I could
Dan Loughlin
go and do it on a spec basis.”
It highlights a growing challenge for New Jersey: While it’s still a major draw for pharmaceutical research and development, speed to market
NEED FOR SPEED
Turnkey lab space, faster approvals seen as key to competing for life sciences tenants
By Joshua Burd
Thor Equities recently started construction in its plan to overhaul 95 Greene St., a 350,000-square-foot building in Jersey City, where it aims to attract life sciences users. Those plans include extensive upgrades to mechanicals, HVAC, vertical conduits and a new rooftop generator, along with a new prebuilt lab suite on the third floor, which it will deliver by late this summer.
Courtesy: Thor Equities/JLL